In an attempt to expand its customer base and increase its gaming
console market share, the software giant initiated a price war
yesterday.

Microsoft said it will cut the retail price of Xbox by around 10
percent, from NT$6,600 to NT$5,980 each.

The world's biggest software company started to sell its Xbox
game consoles in Taiwan last November and has sold about 350,000
of the machines as of July, according to data obtained from
various local retailers.

Globally, Microsoft has sold over 9.4 million Xbox consoles
including over 1 million in Asia, said Grace Chou, manager of
Microsoft Taiwan's home and entertainment division. She refused
to reveal the exact sales figures for Taiwan.

Microsoft wants to use the price cuts to gain on rival Sony
Corp's PlayStation 2 (PS2) ahead of the Christmas shopping
season. Last week, the company announced in Japan that it would
slash the price of Xbox by 32 percent starting yesterday, after
Sony Computer Entertainment Inc said earlier this month that it
would cut the price for a PS2 by 21 percent.

Sony said it has no plans to join a price war in Taiwan.

As for Nintendo Corp, the Japanese company has already reduced
the price of its GameCube machines from NT$5,980 to NT$4,980 each
last month, and will not make further changes in a short period
of time.

According to the company's statistics, Sony has sold about
250,000 PlayStations in Taiwan since 2000. But, with over 20
million bootlegged consoles and a huge amount of game software
being sold since 1994, Sony still leads the market worldwide.

The price-cut strategy appears to have been effective in Europe.
In April Microsoft cut Xbox prices in the European market and
reported a 49 percent surge in sales in the UK, 46 percent growth
in France and a 55 percent increase in Germany in May, the
company said.